Oh, well caught, well caught


This chart indicates that one product group above all was responsible for this increase in goods exports, namely the group \’mineral fuels, lubricants and related materials\”, which made a sudden leap to 6 times its previous level, increasing by €5 billion, an amount corresponding to the overall increase of goods exports from Greece (see paragraph above).

This is a bizarre finding, for two reasons. What is striking about this particular group is that it mainly contains products that are highly capital – and material – intensive (coal, petroleum, gas, electric current). Labour cost cuts are therefore the least likely explanation for this sudden surge in exports. Moreover, the surge in exports of this product group from Greece is limited to the rest of the world. There is no increase in these exports to European markets.

An explanation for this riddle can be found in a note from the Greek statistical office, the Hellenic Statistical Authority, Press release, \’Commercial transactions of Greece (Estimations): August 2012\’, October 10th. The note says the following: \”Data on trade in petroleum products are not included due to a revision under way of the respective time series. The revision aims to incorporate revised primary data that have been recently provided by the Customs Authority\”.

In other words, what may very well be responsible for much or this entire surge in Greek exports are \”revised primary data\”, i.e. simply a difference in counting.

We\’re back to Hayek again. The numbers that politicians try to use to plan the world aren\’t good enough for anyone to use to try to plan the world.

10 thoughts on “Oh, well caught, well caught”

  1. So Much For Subtlety

    There is a story that the first Czech Five Year Plan had a section on reindeer that had been crudely crossed out.

    They had simply imported the Soviet model wholesale to the extent of including animals that did not exist in Czechoslovakia.

    I don’t believe it, but I have heard it.

  2. The rise in exports is probably phantom, but the current account deficit might be less than what we had previously believed. It is also true that it is possible that Greece was previously consuming stuff domestically but as the economy has contracted it is now exporting fuel.

    But, while there is some evidence of wage contraction and a gain in competitiveness, it really isnt enough to make us believe that the Greek economy can recover. The inability of the government to reduce the excessive burden of state employees and their inability to raise enough income to meet their spending means that the Greek farce will end in tragedy.

  3. Ken: the Greek state sector is already far below most mid-to-high income countries as a % of GDP. The sole problem is that no bugger pays tax.

  4. john b. If you look at Eurostat we find that Greece’s general government expenditure as a percentage of GDP is 51.8% in 2011, placing it at 5th in 2011 amongst EU states near the top.


    It only collects 42.3% of GDP, which means that it collects more tax than the UK (40.7%) more than Spain (35.7%), but less than the Germans (44.5%) and the French (50.8%)


    Greek government final consumption expenditure is small relative to comparable countriees at 14% of GDP, but their social benefits at 22% of GDP are the highest in Europe.

    They have a Scandi expenditure with too little tax revenue.

  5. Thanks, Ken. Most interesting. To misquote Wilde, (I think,) all happy countries are alike, but unhappy countries are unhappy in their own ways…

  6. Putting it that way in the last paragraph really doesn’t quite properly emphasise the important point; if you say the figures aren’t good enough, that encourages people to think that all that is needed is more rigorous collection of data to get better figures.

    What economics actually tells us is that (a) the figures are intrinsically unknowable and (b) even if you could know them, they would tell you to “plan” what the market was doing anyway, in other words to not plan at all. Effectively, marcoeconomcs as a science does not exist at all, it is a pseudo-science like astrology. Which is why it never gets the correct answer, other than co-incidence.

  7. I hate to burst everyone’s bubble but the increase might actually be real (though not the result of austerity)

    Motor Oil Hellas completed an expansion of their refinery by 60,000 barrels per day in 2010. If you assume full capacity at 100 dollars per barrel prices, that is an increase in revenues of 2 billion USD all of which will be exported. This is probably under estimating a little because product prices are higher than crude.

    The other 3 billion might well be forced exports as local demand shrinks massively (excise duties are up sharply).

    As for where they are selling, its mostly Turkey, a market that has huge and growing demand. EU markets are already over supplied. Turkey changed its specifications in 2011, shutting out Russian products and opening new opportunity for Greece.

  8. Hi Serf

    Interesting point. But I assume that the Greeks would have to import the crude to refine it. This should mean that their imports of crude have increased by 60K x $100 x 365 or $2 billion. But in the year when their exports of fuels rose to $9.1 bn from $2.4 bn, their imports were essentially flat $16.1 bn relative to $15.4 bn in 2010.

    I can see that there might be some squeeze out, but I cannot believe that it was sufficient to provide the oil and the extra.

    If we trust this random piece on refining in Korea – the export margin on petrol (which I assume is the value added) is $13.4 per barrel, so the incremental improvement in the trade account based on the refinery should be no more than $300 mn not the $6bn that you get if you net mineral fuel imports and exports.


    This is a breakdown of exports and imports.


    Unfortunately we cannot tell from this what happens to exports and imports of oil in 2012 which might tell us more about what is going on – in year on year terms fuel is up dramatically, but the numbers are odd since they are up to July and should therefore account for about 58% of total trade for the year – which they kind of do, except for mineral fuels where the trade up to July is 2% of last year’s total – suggesting that the numbers must be reported in a rush at some point.

    All that one can say is that I remain confused about the data and pessimistic about Greece’s ability to export their way out.

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